Our story in the Wall Street Journal today looked at three recent cases where U.S. officials revived the so-called “responsible corporate officer doctrine” to try to hold executives personally and criminally responsible for corporate violations of U.S. food and drug laws. See here for a link.

This doctrine lets prosecutors go after executives for misdemeanor violations of the Food, Drug, and Cosmetic Act, even if the executives weren’t aware of violations. That’s a lower standard than for other industries — because of the potential for health-care and food products to cause death and injury.

Such prosecutions trouble executives and lawyers in the health sector because the U.S. Department of Health and Human Services has sometimes sought to exclude convicted executives from future participation in Medicare and Medicaid, which can be a career-ending punishment.

There’s an interesting appeal now underway on the fairness of this very issue.

A U.S. District Court in Washington in December affirmed a federal health-care program exclusion of three Purdue Frederick Co. executives who had earlier pled guilty to misdemeanor violations of the food and drug laws associated with the misbranding of the drug OxyContin. The Justice Department didn’t allege that the three officers participated in or were even aware of the misbranding, but rather that they were “responsible” corporate officers at the time the conduct occurred.

Their exclusions have been appealed to the D.C. Circuit Court of Appeals by highly regarded appellate lawyer Carter G. Phillips of Sidley Austin LLP. Phillips told Law Blog Tuesday afternoon that he is representing all three executives.

In their appeal, the executives contend that the exclusions are unlawful. They also argue that the 12-year period of exclusion is three times longer than the longest period the agency has previously imposed for misdemeanors. That includes misdemeanors where there was allegedly knowing and willful misconduct.

The Association of Corporate Counsel, a bar association for in-house lawyers, has filed an amicus brief, arguing that the exclusion of Purdue Frederick Co.’s former general counsel misconstrues the role of an in-house lawyer.

“This imputation of liability on an in-house attorney for a client’s misconduct ignores the traditional boundaries of the attorney-client relationship, threatens to undermine the ability of in-house lawyers to deliver unvarnished advice to their clients and raises significant due process concerns,” it says.

About Law Blog

The Law Blog covers the legal arena’s hot cases, emerging trends and big personalities. It’s brought to you by lead writer Jacob Gershman with contributions from across The Wall Street Journal’s staff. Jacob comes here after more than half a decade covering the bare-knuckle politics of New York State. His inside-the-room reporting left him steeped in legal and regulatory issues that continue to grab headlines.

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